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In any business, improving efficiency and profitability are critical to ensuring the business is able to sustain itself and grow over time. This is especially true for manufacturers and explains why businesses in this industry are projected to spend over $9.1 Billion on technology to help automate data collection and improve processes by 2026.
In order to track productivity across their operations, manufacturers rely on a number of key production metrics to quantify the work being done.
Throughput time is one of the primary factors manufacturers consider when trying to better understand their operational efficiency. It shows how long specific tasks take and their impact on the general productivity of the operation. Therefore, throughput time enables companies to identify bottlenecks and inefficiencies so they can understand opportunities to optimize their operations and increase output.
In this post, we’ll provide a comprehensive overview of throughput time, the importance of tracking throughput, and how manufacturers can leverage these insights to speed up production.
What is throughput time?
Simply put, throughput time is the amount of time it takes a business to bring products through the various stages of production. This period covers the time raw materials are brought in all the way to the last step, encompassing the time spent preparing the raw materials to when the finished products are ready for shipping.
Because it covers all the various steps and production stages, throughput time can be broken down as follows:
Processing time: This is the time a product spends on the production line. Processing time is the actual time raw materials go through the various production stages on the shop floor.
Move time: Workers spend some time moving to and from their posts. Additionally, the materials and partially assembled pieces are also moved from station to station to continue the production process. All of this is known as move time and should be considered when calculating throughput accurately.
Inspection time: Manufacturers need to ensure that they provide customers with high-quality products to secure their business. As such, companies must allocate a reasonable amount of time to thorough quality inspections, examining the products for any damage and inconsistencies.
Wait time: Before processing, moving or inspection can begin, raw materials and works in progress might queue behind other items. The time spent waiting is known as wait time or queue time.
So, when it comes to determining the manufacturing throughput of a product, the above periods are summed up.
Calculation for throughput time
Throughput time = processing time + move time + inspection time + wait time
In some manufacturing instances, throughput time is used interchangeably with cycle time. However, the latter differs by focusing on the time required to complete a particular process.
Cycle time is realized by dividing the net production time by the number of items produced.
The importance of tracking throughput time in manufacturing
As we’ve touched on, knowing how long it takes for products to go through the entire manufacturing process is critical to ensuring manufacturers are operating as efficiently as possible. Some of the benefits include:
Improved production efficiency: By determining how long it takes to manufacture products fully, businesses can better understand whether they’re making the best use of their resources at a given time. The misallocation of resources can significantly hinder production, resulting in poor production efficiency.
Increased profitability: By reducing throughput time, manufacturers can make a greater quantity of products in a smaller period of time. As such, businesses are able to reduce their production costs resulting in higher margins.
Customer satisfaction: One of the biggest frustrations for customers is experiencing long wait times to receive the goods they’ve ordered. Analyzing throughput time reveals areas of the operation that can be trimmed, reducing the time it takes to make and distribute products.
Better supply chain and inventory management: Knowing the different throughput time components help reveal usage patterns for raw materials and other inventory. Adjusting the time required allows manufacturers to increase or decrease the inventory levels as needed, improving overall inventory management.
How to reduce throughput time
Now that we’ve reviewed the many benefits of tracking throughput time on a consistent basis, let’s discuss some of the best ways a manufacturer can go about improving this metric.
Improve employee training: Operators manning the workstations directly impact how long it takes for a product to move through the production process. Therefore, manufacturers must provide upskilling for their employees, increasing their familiarity with the necessary production processes.
Using technology to improve operator training also ensures that they’re equipped with knowledge on how to respond to any problems that may arise, reducing downtime on the production line.
Embrace automation: In some instances, the operators themselves can be a bottleneck and a source of inefficiency. By embracing digital tools, manufacturers are able to automate many of the manual, human-based processes such as data input and record keeping.
By integrating these systems with the existing production processes, businesses can expect a significant improvement in overall productivity, ensuring human resources are being allocated to value-added work.
Regular, proactive equipment maintenance: Machines on the shop floor can break down over time with frequent and prolonged use, resulting in costly downtime. Ensuring that machines and equipment are well-maintained can significantly reduce this downtime, helping businesses keep their production process up and running more consistently.
Ultimately, manufacturers shouldn’t wait for machines to break down. Instead, the equipment should be maintained in accordance with a regular maintenance schedule to prevent downtime caused by machine failure and repairs.
Optimize workflow: As we’ve seen in recent years, manufacturers have continued to embrace worker augmentation in order to optimize operator workflows and improve productivity. With tools like digital work instructions, businesses can reduce instances of quality defects resulting from human error and can reduce any friction existing within existing production processes.
As we’ve discussed, tracking throughput time can be a massive benefit to manufacturers looking for opportunities to improve productivity and increase operational efficiency.
With a platform like Tulip, manufacturers can take a number of actions to help reduce throughput time by augmenting human-based processes, automating data collection, and simplifying the day-to-day procedures occurring on the shop floor.
By visualizing real-time production data, managers are easily able to identify and analyze bottlenecks and understand the causes of inefficiencies, enabling businesses to achieve continuous improvement over time.
If you’re interested in learning how Tulip can help you can improve productivity within your operations, reach out to a member of our team today!
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